Somebody stop the bleeding! After losing $164.8 million in the first quarter, Circuit City has announced that they’ve taken it to the next level, and, not to be outdone by last quarter’s disaster, have managed to lose $240 million dollars.
Their new CEO, James A. Marcum, who has only been on the job a week, said:
“We realize the performance of this company is unacceptable to all of our stakeholders and that it is imperative that we take the right steps to accelerate our turnaround.”
And so, as is our habit, we ask you, the consumer, to tell us what is wrong with Circuit City and how they can fix it. We’ll choose the best comments and share them with Mr. Marcum.
What’s wrong with Circuit City?!
Circuit City Posts Wider Loss [Washington Post]
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Fix it? Hell can’t they just get the government to bail them out?
Minor nitpick, but it makes editors look… less intelligent than they probably are.
$ means dollars. You don’t need to use both.
Here are three case examples of sales to me that circuit city lost in the last year or so:
Big screen TV (August 2007) – Aparently the sales force had adjusted the brightness/contrast on the less expensive models (my price range) so they looked like **** compared to the
expensive models. No remote controls were left near the TVs, so I could not see what they really could look like. The sales person was busy with another customer. Disgusted about
this game, I left and purchased one a couple of weeks later at Office Depot.
Large capacity USB drive (December 2007) – Looking for 500 MB+ external USB drive. Only internal models were in stock.
Panasonic phone (December 2007) – Looked at phones and found a Panasonic model I wanted to purchase. I tried to find it on the shelf. The boxes were stacked neatly, but placement had no relationship to either shelf tags or to placement of the demo models. I also noticed that few
model numbers on tags matched those on the boxes. After looking for approx five minutes and a couple of attempts to get sales help, I left. I purchased the phone of interest from Target the same day.
Lessons: Don’t play self-defeating games to try to up-sell big screen TV models, keep things in stock, match shelf tags and demo unit placement with product locations.
I worked at CC this summer. Never lied about services, always said the pros and cons if them, but the credit card authorization thing has nothing to do with the people at the store. The computer will just randomly pop up saying it needs to call the bank.
CC losing money????
CLOSE THE DOORS!!!!!!!!!!!!!
Sell more copies of Mad Magazine.
Some really good thoughts here so far.
I will start off by saying we just recently had “The City” open in Cleveland, TN (my home). And even though I have heard a lot of bad stories about CC staff, I have to commend the employees of our store. They were very helpful the last time I was there, helping pick out a HDTV for my dad. The mini-touch laptops/”info bags” they supply the employees with really seem to help, especially with product questions and stock numbers.
That aside, I will say this is what they need:
* WAY better DVD/CD selection – It really is a joke. While Best Buy has row after row of clearly marked DVD’s (by genre and alphabetical), The City barely has 5 rows of DVD’s (Only 4 of CD’s) and they are not as clearly marked.
Also, their DVD prices when compared to Best Buy are usually not even close in value. The City is on average $5 or so more. Also, they sometimes don’t even have notable new releases in on their release date! I recently went looking for the highly promoted 10th Anniversary Big Lebowski DVD and they hadn’t gotten any copies, even after being released 4 days prior.
* Firedog (Who picked that name??) needs to be more well-defined – Where as Geek Squad is almost self explanatory, they also do well in explaining their services through signage. I didn’t even know what Firedog was or what they did until I asked someone! And even then, the staff they had at our store were very vague on what their services were and what the prices would be. Needless to say, I installed our HDTV myself.
* Exclusive deals shoot them in the foot – Here’s another example: I went looking for a case for my iPhone. Since I didn’t feel like driving to Best Buy (the nearest one is in Chattanooga, 18-20 minutes up the road), I decided to stop by The City. After looking around for a while, I approached one of the Cellular specialists and asked if they had any iPhone supplies.
He informed me that due to their deal with Verizon, most AT&T and/or iPhone stuff wouldn’t be available in their store. So, I ended up giving my money to Best Buy after all. Best Buy and HH Gregg don’t really have any big “exclusive partners,” so they offer almost all companies’ products in their stores. I don’t see why The City can’t do this as well!
Just my 2 cents…and they might echo a lot of the other great posts here.
I used to have nothing against Circuit City, but slowly I came to realize that every time I went to the cash register it took upwards of 10 minutes to check out. There was never more than one person in front of me. After about 3-4 visits worth of this, I mentioned it to someone wandering around the floor with a black shirt in the most polite terms possible. He told me he ‘wasn’t a manager’ and stalked off before I could say word one. My cashier, overhearing this, managed to belt out “I’m sorry, we’re busy.” (They weren’t)
Christ. Easily one of the worst experiences I’ve had retail shopping.
My ideas?
1: Review lease commitments for all the stores that have been closed, and figure out how much it will cost to terminate them. Then, pay them off. That will save you about $45 million a year in lease costs.
2: Pay CarMax a breakup fee to get out of the contingent liability remaining on the store leases. If the economy slows down further and some of the tenants bail, CC will have to service those, too.
3. Review store performance on a unit-by-unit basis. If a store isn’t profitable, close it.
4. Convert all the small footprint stores to ‘the city’ concept, and target products, presentation, and staffing to cater to affluent customers. If small stores are in bad locations, convert them to warehouses for online sales pickup.
5. Hire staff who are knowledgeable about the products they’re supposed to sell.
The price that each individual store pays for the console is the same as it’s price point; it is a break even.
As for car audio, our roadshop services about three thousand vehicles a year; mostly for subs, and amps, in dash dvd/nav systems. And no, there is a huge margin in the units themselves, often as much as 30-40% depending on the brand/model.
Many customers are shopping at circuit city for instant gratification. They can get the item cheaper on line, but they don’t want to wait.
Since circuit city isn’t making any profit off of the electronics, they will try to sell extended warranties and over priced accessories. Now the customer is held hostage listening to the sales pitch.
Since the stores are under staffed, the customer has to wait just to hear the sales pitch. It’s going to take at least 15 minutes to get out of the store with your item. More like a half hour.
Then if you don’t buy the accessories or warranty, you’re stuck with knowing that the sales person may be fired for not meeting their quota.
Cut your losses and start over.
Circuit City used to be the only store of it’s kind where I lived. Best Buy moved in and ate their lunch.
Circuit City doesn’t have the best prices. Best Buy sold cheaper warranties. Best Buy carries more inventory.
Circuit City is the place I go when Best Buy is out of stock.
Electronics have become such a commodity, people are unwilling to pay extra for service unless it is very specialized (and expensive). Circuit City cannot compete with Best Buy’s existing infrastructure – Best Buy’s stores are better/bigger and I suspect distribution is too.
Everybody and their grandmother is selling electronics these days. Walmart is getting in on the action. Costco and Sams Club are doing their share. I actually saw an LCD television for sale at Kroger yesterday. The market is becoming overly saturated with competitors doing what Circuit City does.
A different approach is needed. NewEgg found a way to provide excellent pricing, great selection, and exceptional customer service – it can be done!
Better customer service, media blitz, reinstate sales commissions, and for the love of god STOCK AND ORGANIZE YOUR DVD SECTION PROPERLY.
I made a hefty purchase at CC last weekend. and you know what? None of the sales staff even looked at me. They had no motivation and I pretty much just nabbed what I wanted and brought it up front.
Fix your crap CC.
Also, no sales staff in your entire computer section?
I noticed that too. No one, for an hour. WTF?
Outsource it. If you want in-store help you’ll have to travel to Bangladesh.
Previous comments aside, I think they need to organize the store better. The layout is not customer friendly at all, and it just seems like merchandise is all over the place. The video game section that I frequently visit is just not linked together properly. I guess thats the best way to describe it. Its just not arranged in customer friendly aisles.
Stop selling open box items that you know are broken, every time I go into a CC there is a huge table at the very front of the store with a ton of these items on them, this is very fishy and does not sit well with me. Placing these items next to similar items would be better instead of bombarding customers right away with these items as soon as the customer walks in the door.
Maybe re-hiring some of those employees that actually had knowledge that you fired in order to hire more minimum wage worker drones would help too. Although I bet those employees have long moved on now, so good luck trying to recruit them again.
Hire someone to get the weekly ads right. Most of the time there are huge signs stating the misprints, and this happens every week, its not just a once in a while thing. Soon customers learn not to trust your ads and then your business is lost.
Get a proper inventory system, when I ask an employee to look an item up in the computer and it shows 6 in stock yet there are none on the shelf then there is something wrong. When employees cannot find the section that your product is supposed to be in there is also something wrong. The store locater on the website is also notoriously inacurrate. An online inventory system where you can look up if your local store has a product is something shoppers expect these days. Shelf tags don’t match up with what scans in the register, fix this or don’t put up any shelf tags and instead offer self scanners at every aisle.
Circuit has a couple of chances to succeed – but they have to give up a bit of control of their own destiny:
1.) Look for people that would like to see 2 strong CE category killers – not just 1. I’m thinking about people that are going to be really hurt in a squeeze between Best Buy and Wal-Mart negotiating them to death on the high and low-end. (Looking at you Microsoft, HP / Dell, Wireless carriers, Intel,…)
2.) Develop unique partnerships with these guys (all of whom have $$$) each owning a section of the store. Dell + Microsoft + Intel combo on the hook for bringing PC’s to life. Etc. Dell as the exclusive PC seller – create a PC version of Apple store in the middle of CC. Make CC THE place to go to for Dell. Ditto Sony or Samsung or LG in flatscreens. Dedicated showcase for them. Simplify choices by offering deep – integrated solutions.
3.) Get partners to coinvest in refurbing the stores. They’ve been neglected.
4.) Improve Firedog and making it viable alternative to Geek. Again – lots of players have vested interest in Geek Squad not being a monopoly – ally with them. Fixes: Simplify service offering menus. Clarify value prop in advertising.
5.)Customer service is a red herring.
there are many alternative places, such as WalMart, Costco…, where the consumers can purchase the products of the same category they can find in Circuit City. Therefore, in order to compete with those discount stores and survive the current economy, Circuit City needs to differentiate from its competitor how it deliveries the goods.
first of all, they need to have trained salesmen on the floor. They need to know the products well and how to use them. not only that, they can give the customers hints how to optimize their experience using their products.
Second, since the economy is bad and people watch what they are spending, Circuit City should have better finance plans for all goods in the store, like they pay 10% down payment first and than monthly payment which the customer is comfortable with.
Third, after sales, they should call the customers 3 days after the sales to see if they have any problems with the products. If the customer purchases big and expensive products that requires calibration, they can send the technicians to the customer’s place to do installation and at the same time pay attention to the customer’s electronic items and maybe offer recommandation to optimize their product using experience. They should also keep in contact with the customers to make sure they have no problem with installation.
Forth, Circuit City can also have Trade-In program where the customer can trade-in the old products for some discount for purchase. The company can turn around and sell refurbish products or donate to charities for taxes reduction purpose.
The government is just giving that money shit away. Ask Uncle Sam. Lately, he doesn’t even make you reach into his pocket to get it.
By not giving employees commission they really boned themselves.
I was in there a few weeks ago, they had 4 people on the floor just standing at the end of a row talking to eachother and here I am shopping. Not one of them will of course bother to even look at you. So as the customer you have to break in to this 4 man crowd of employees and pretty much ruin their fanciful little day because you need to get an mp3 player from behind the glass.
For all the productivity they are getting out of their workers im afraid to say they could easily trade 4 of them in for 1 commission paid employee.
And, it could certainly work. You dont have to mirror BB with little groomed concierges that follow you around the store and make you feel equally uncomfortable as the 4 guys in a group situation. Start treating Circuit City as the place where smart people shop: Let them learn at best buy, let them buy at circuit city. Fewer employees handling a better assortment of high tech parts and accessories: the walk-in newegg we’ve all been waiting for.
Why bother saving CC?
Anyone that has read the Consumerist for any length of time can see the litany of horror stories that come out of this company. It was truly gratifying to see the CEO forced to resign because of this continued poor performance.
When Blockbuster Video (themselves a company in peril, based on yesterday’s technology) looks at your books and says “no thanks” to an acquisition, you gotta ask yourself “Is CC worth saving?”
To the CC Board of Directors – Please put CC out of its (and our) misery before the end of 2008.
Circuit City lost my respect and business for all time when they loaded my 96 year old mother in Florida on social security into a Polaroid television which died during their 30 day warranty period, but I wasn’t in town to be able to help out. I arrived on the 31st day after purchase and their attitude was “too bad, so sad”. They did show a bit more concern when I dropped it on the floor right in front of their display of these pieces of junk… but their concern was limited as to who was going to clean the mess up. I told those within earshot not to worry, nothing was lost… the sets don’t work anyway. Haven’t been back since…. and never will.
Stock the stores they choose to keep open.
It always looks like CC’s are low on inventory. Makes me think they are going out of business sometime soon.
They need to bring back sales folks paid on commission. Sad thing is they lost a cultivated sales staff and chances are they will never get it back fast enough to fix much of anything.
I worked for CC for almost 4 years and I can tell you that CC doesn’t know how to manager shit! I worked in PC/Digi Cam sales, then cell phones before Verizon took over, then Customer Service, so I’ve got a pretty wide view of things from an employee’s perspective and from a customer service perspective.
First, advance employees from within more readily. I worked there for a long time and worked very very hard and gained recognition from my department manager but by the time I quit I was still PART TIME because they “didn’t have enough full time slots”.
Second, DO NOT FIRE YOUR BEST (and thus highest paid) AND MOST EXPERIENCED EMPLOYEES! Yes, this is a sure fire way to save money in the short term, but the new employees they bring in are going to take so long to be on par with the previous experienced employees. They made a HUGE mistake laying these people off.
Third, they need to listen to what employees tell them customers are saying and what customers want. Accept this feedback instead of ignorantly passing it off as crap. Why is CC second to BB? Ignorance and unwillingness to change!
Fourth, get ride of shitty and always unreliable brand names like Belkin, CyberHome, and all those cheap as crap MP3 accessories! So much time was wasted by customer service having to continuously swap out these such items, not to mention shipping costs to and from each store!
Fifth, this isn’t something that can be fixed anytime soon, if at all, but part of the reason why BB has such greater visibility to everyone is LOCATION! CC has historically displayed a tendancy to purchase cheap real estate. Perhaps that high priced lot RIGHT NEXT TO THE FREEWAY EXIT is a good idea after all!
Sixth, DO NOT HIRE TEMP HELP TO LOAD YOUR SHIPMENT TRUCKS THAT ARE GOING TO YOUR STORES! There is so much product that arrives with each store delivery that has an incorrect shipping label on it! On top of that, Product A is quite often “electronically shipped” to Store A but ends up at Store B! I have to be the only employee that went through almost every piece on a truck to make sure that the shipping was processed correctly, and if it wasn’t, I made the necessary calls to fix it!
Circuit City is a complete joke from a corporate perspective and I pity each and every one of it’s gullible stock holders!
CC is literally next door to Best Buy in my town. I *always* check both to get the best price, and I haven’t bought an item from circuit city in two years. That’s their problem.
Secondly, they did exactly what Radio Shack did – tried to become an “everything” store instead of a niche store. I’d probably shop at Circuit City more if they didn’t jump all over me to buy a cellphone and credit cards when I enter. The sales staff stand around then assault you like squirrels on the world’s last peanut. Four of them will rotate asking if I need help every thirty seconds. Shopping at Circuit City makes me feel like I’m buying a used car- get rid of those horrible commission based 17 year old sales people!
How about actually having the Items you advertise on Sunday still in stock at the Store on Monday too? How many times have you gone into a Circuit City to buy a Game or even a spindel of DVDRs that they have on sale only to find they don’t have one in the store and won’t get anymore until after the Sale ends? And Oh yeah by the way no rainchecks.
You guys are nuts. Retail customer service is totally overrated. They should do one of two things: either run MUCH leaner and reduce prices to the point where there’s a noticeable price difference between them and their competition, or go upscale and sell exclusive and expensive items. (I’d vote for the former.) Frankly the only thing that differentiates them and Best Buy is the color polo that the employees wear. They sell exactly the same stuff for essentially the same prices. And in cases where retailers are not noticeably different, the biggest fish wins.
They Pay kids minimum wage and then a .50$ incentive for each warranty they sell and you wonder why there’s lousy customer service? I used to work for CC a long time ago when they cut the top sales people. CC is a joke! It’s usually in a terrible location, and it’s more expensive than ordering it online at amazon and having it shipped. Even when I worked for CC I’d go to bestbuy to buy things because we couldn’t get stuff at “cost” anymore. When it was commission you had people working hard, maybe a bit shady, but they worked hard. Now they just stand around or hide from the customer. I go in CC when I’m feeling bad about life, and then walk out praising the Lord. Nothing has changed there.
Let them burn.
No kidding. They need to fix the DVD and CD sections. It’s like the employees have never heard of alphabetical order. There is no rhyme or reason to the order there. The service suck as well. The employees prefer to ignore customers. The stores are also real dark.
Hire knowledgable salespeople and inspire them to care about what they are doing. Don’t automatically add the extra warranty charge without asking the customer. (This happened to me when I reluctantly held my nose and bought a car stereo there last week. I mentioned it to the manager, and her response was: a – there’s no charge for it on your receipt [that’s because i stopped him from adding it, but only because i was suspicious of everything about them and therefore watched everything he did, and b – “we put that on there for people to consider adding” or some BS like that – the correct answer is c – “We apologize for doing that, we will train our salespeople not to add extended warranties without asking customers if they want them.”
The thing is, there was a decent chance I would have bought the extended warranty, because i think car stereos can be a bit flaky… but add it to my purchase without asking, and your company deserves to go away.
It’s an easy fix for any CEO with a GED:
1. Fire everyone except the top corporate salaries
2. Close doors
3. Take a huge golden parachute ride
4. Wait for Best Buy to purchase the remaining assets.
C’mon people, have we learned NOTHING on how to deal with these situations over the past few years?!?
Tell the cashiers to get the bones out of their noses, and stay off their cell phones.
Fire middle and upper management. It’s their job to make the business successful.
Be the “Target” of electronics Nothing but simple clean displays, great advertizing and helpful staff.
That’s funny! I thought I would share my most recent trip to circuit city:
I saw a laptop I wanted in Sunday’s newspaper ad. This was Sunday afternoon, so I called the store to make sure it was still available. I called 3 times, and all 3 times an automated voice told me the store was closed, and could either tell me store hours and directions or get me to the 800 number. The flyer said they were open and clearly stated their hours.
I finally got through on the fourth call I tried and Circuit City apologized and told me their phones were messed up…okay, fine. She put me on hold and said she would transfer me to the correct dept. to answer my question. It rang and rang… no one ever answered. Finally I was pushed back to the operator, and she transferred me again. After the second time no one answered and it pushed me back to the operator, I asked for a manager.
Okay, fine. I’ll just have a manager look it up for me. I gave him the details on the computer I wanted…sku included…and he said they were out. I could call the 800 number and order it or possibly find out if another location has it.
I called the 800 number. The CSR said that she could see the store I had just called had 8 of them! And she stated it was updated fairly quickly, so maybe the manager had made a mistake. At this point I just decided to go down to Circuit City myself.
So I went down to the store, and sure enough…the laptop was in stock. I was looking around for someone to help me, and a male employee giving a PIGGYBACK RIDE to a female employee walked right by me. GREAT! Well, I finally just went up to someone in the TV department and told him I wanted a computer. He took care of me.
So yes, I love my new laptop…but do you see why Circuit City is losing money?
It’s easy:
~Create an appealing environment (well-located, clean, well-lighted, clearly signed, and attractively merchandised)
~Carry the goods your customers want. Cover your price points.
~Hire and retain friendly, knowledgeable staff who deliver extraordinary customer service.
~Merchandise so your customers can touch and hold everything.
~Fast cashiering and fair return policies.
~Execute all of the above and you might get away without competing on price. Too much, anyway.
This is Retailing 101. Go to any Barnes & Noble and see how it’s done.